Just Sold! Wilola Apartments Unit 306 – 17 Reasons this Makiki Apartment was a Great Investment Buy (ie. why it pays to look beyond cosmetic defects)

Exterior of Wilola Apartments at 1605 Pensacola St., Honolulu, HI 96822

Property stats for 1605 Pensacola #306:

1605 Pensacola St #306, Honolulu, HI

2 Bedroom, 1 Bathroom, 1 Den/Bonus Room, and 1  Assigned Parking

Square footage: 840 square feet total —  720 square feet living 120 square feet lanai (Yes, that is a HUGE lanai!)

Original listing price: $365,000.00 (reduced to $335,000.00)

Purchase price: $330,500.00

MLS #202120846

An Intro and a Thank-You:

Before I start this article, I just want to say that I am so excited for my investor buyer client! This beautiful apartment is located on the upper end of Makiki, in an area just off the beaten path, located on a small stretch of road where Pi’ikoi and Pensacola meet. When I found this unit, it was in pretty rough condition and had been on the market for over two months. Honestly, it was not a pretty place. It had drawings on the walls, dog-chewed countertops, and was missing handles and doorknobs where you really would have liked to find them. However, based upon my experience in over 1,500 transactions where I had priced out repair items in inspection reports, I thought this might be a pretty special place that, with the right type of effort, could bring an investor lots of instant equity (fast sweat equity with minimal time spent). My client took a leap of faith and put in an offer sight unseen. I thank my client for their trust, and golly did they need to trust me on this property! 

Finding the Investment Unit:

This unit was purchased as an investment and restoration unit by one of my clients. We started looking at units together in the end of 2021, with an eye towards uniqueness, sustainable value, low HOA fees, and high rental value. 

So, how did we decide on this unit? Well, I showed my client that there was a lot of value to be had in this unit. When an investor looks to buy, you always want to look for instant sweat equity. The question is: If I buy this today, can I have value at this price, tomorrow. In this case, the answer was a resounding “yes.” 

Assessing the Repairs:

There were a lot of small repairs that needed to be done, and I went through an estimated budget on what the repairs costs would be. The goal was to minimize expense while maximizing returns. In my real estate career, I’ve seen and analyzed over 1,500 inspection reports or requests. It is all about seeing the gem behind the rough exterior. When I found this unit, it was pretty rough. Luckily, I have a good amount of experience in assessing restoration costs. I have personally done restoration work from the simple (small drywall fixes) to the really difficult (building a butcher block countertop with a friend), and I even used to work as a painter way back when. Also, luckily, my client has also done quite a bit of handiwork and was not afraid of throwing some muscle into an investment project. A few of the big issues we identified were cosmetic, and a few required a decent amount of labor but not much materials cost:

1) Repainting all the walls, ceilings, and security door

2) Pulling out old carpet and replacing it with new flooring

3) Replacing broken window panes, window openers, and screens

4) Replacing broken drawer fronts and cabinet parts

5) Renovating the kitchen countertops and island that had pretty clearly been chewed by a dog

6) Replacing an old microwave hood that had seen better days and was missing quite a few parts, including the door

8) Fixing broken off knobs and handles on practically every door, including on the refrigerator and the oven

This property, frankly, wasn’t too pretty. But, this is exactly what my client was looking for, and is exactly the type of property I have helped flippers with for years in my legal* practice (*Joey does not work as an attorney in his role at Hawaii Life). This unit was originally listed at $365,000.00, but after a price reduction and negotiations, this property was purchased for only $330,500.00. This left ample room in the budget for the buyer to renovate and make sure that their new tenants can live in comfort.

Finding Value Beyond Cosmetics:

So, why would I identify a property as a “good investment buy” that was clearly used, abused, and left to its devices? This place has some truly unique and wondrous features that make it a nearly ideal investment property that could result in significant increases in equity.

The Lanai with a Mountain View:

Huge 120 square foot lanai at 1605 Pensacola St. #306, Honolulu, HI 96822

Without further ado…

Here are the 17 Reasons why the Wilola Apartments are a Great Investment Buy:

1) This unit has Natural Gas, so when you cook at home, you can cook with a real flame instead of relying on expensive electricity, and the cost of gas is already covered by the low HOA fee!

2) There is a private, fenced, and gated pool for use by the residents of Wilola Apartments where you can take a swim with privacy from the street.

3) The Wilola Apartments are a 3 story low rise which means they are exempt from the expensive sprinkler requirement for 10+ story buildings.

4) The Wilola Apartments is a quiet building due to concrete pour floors and stairs, and cement block walls. This construction technique is perfect for investors who want their tenants to live happily and quietly. In addition, this type of cement and concrete construction makes the builds well-insulated against the heat.

5) Generous numbers of jalousie windows allow for significant cross-ventilation so you don’t need to use AC to beat the heat!

6) The front and back of this unit both have lovely mountain views.

7) Have a dog? This is one of the few apartments in all of Honolulu where you can own one large dog without a weight restriction. That is an extreme rarity in Honolulu, and usually drastically increases rental value.

8) Dishwasher and/or washer/dryer hookups in-unit. This apartment building has even more tricks up its sleeve: because it has water and drain lines in the right spots, you are absolutely able to install either a washer/dryer or a dishwasher. This particular unit came with a dishwasher pre-installed!

9) The huge lanai!! Most shockingly, this house has an approximately 120 square foot lanai, that measures about 29 by 4ft. It makes a perfect place to spend time outside without leaving your house, and a great place for your dog to enjoy some fresh air.

10) The units in the Wilola Apartments come with two large bedrooms, and a smaller den that many residents have walled off to create a cute bonus room!

11) Bike access! This unit is also located right near at the very start of the recently-installed Pensacola street bike lane. It even has a Biki Bike stop right at the corner. 

12) Get to where you need to go, without ever leaving the bike lanes. Take the lane Makai (towards the ocean), and you end up in Ward and Kakaako, or take a left hand turn at King street and travel all the way to the University of Hawaii, all with trendy restaurants and izakayas along the way!

13) Only mere blocks away from grocery stores, Petco, Walgreens, and everyone’s favorite Japanese dollar store, DAISO.

14) Spacious 720 foot interior with an open concept kitchen with an island!

15) Convenient parking right in front of the unit in an assigned stall, so you can easily commute.

16) The HOA Fee is super low for the space you get! Here, the fees are only $545, and they cover both the gas costs and pool upkeep!

17) Despite being in such a quiet location, this property is just a few blocks from the H1 West on-ramp, which you can enter right off of Pensacola. This means that commuters can bypass most of one of the biggest traffic bottlenecks on island between Piikoi and the H-1 on-ramp.

For those interested in learning more about buying and restoring investment properties, please do reach out:

Fact is, I love talking to investors, newbies and veterans alike, about their real estate investment goals and strategies. For me, I really get a kick out of running some numbers, doing some feasibility analyses, and seeing what we can come up with together. Some folks are looking for residential investments, some look for commercial investments. Others look at land acquisitions and development projects. Give me a call and I’m glad to chat, but, I gotta warn ya– we might start coming up with some good ideas together!

Okay, here’s my contact info:

Joey Furlett, JD*, Realtor-Broker, REI | REALTOR-Broker # RB-23572

Phone/Text: 808-818-8811 | WeChat / Insta / TikTok: HawaiiHome8

Email: joeyfurlett@hawaiilife.com

www.hawaiilife.com/joeyfurlett

Real Estate Investing Certification

Luxury Homes Certification

Associate Member, International Council on Shopping Centers

(*Joey is licensed as an attorney in both Hawaii and Illinois, but to be clear, he is not practicing law in his role at Hawaii Life)

Message to my Readers:

If you made it this far, thank you so much for reading. I honestly appreciate your taking the time to read my article. For me, real estate is something that I love to do, and I also love to teach people about real estate.  Also, I really enjoyed getting to celebrate my client’s new purchase. Investment properties are something near and dear to me because they are a way for regular people to build their net worth through careful vetting of properties and even more careful planning and budgets. I was honestly honored to work on this project with my buyer who put so much faith in me during the entire process. Those who know me personally, and also those who have worked with me, know that I make an active effort to never over-promise. Perhaps my legal background predisposes me to being more grounded. That said, I am 100% certain that my client has walked away with a property that has day one equity. I am thrilled for my client, and I look forward to being a part of the restoration process.

Cheers and Aloha,

Joey